Ed Miliband pledges not to back away from energy fight

Labour leader Ed Miliband has dismissed claims that an energy price freeze will lead to blackouts in the country

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Ed Miliband at the Labour party conference

Warnings that Britain could face blackouts if energy companies are forced to freeze prices were dismissed as “scare stories” by Labour leader Ed Miliband.

Mr Miliband wrote to the “Big Six” companies warning that they would face a consumer backlash if they fought his plans for a 20-month freeze following the next general election in May 2015.

His surprise announcement at the Labour conference in Brighton was greeted with horror by gas and electricity suppliers, with predictions that firms deprived of the power to set their own prices would be in danger of “economic ruin”.

And Tory and Liberal Democrat MPs claimed the announcement would stop energy companies investing in the UK.

Hexham’s Conservative MP Guy Opperman said: “It is right that we are addressing energy prices, but Ed Miliband’s approach is clearly counter-productive.

“It is a return to the socialist mantra that Government knows best and the results of this approach were seen in the 1970s.

“It is hard to see how Britain would continue to attract the investment we require from private companies in both conventional and renewable energy sectors.”

Shares in Centrica - British Gas’s holding company - were down almost 4% in early trading, while shares in Southern Electric and Swalec owner SSE fell 3.6%.

Centrica chairman Sir Roger Carr said: “We are all concerned about rising prices and the impact on consumers, but we also have a very real responsibility that we find supplies to make sure the lights stay on.”

And Angela Knight, chief executive of trade body Energy UK, said that while the price freeze was “superficially attractive”, it would “also freeze the money to build and renew power stations, freeze the jobs and livelihoods of the 600,000-plus people dependent on the energy industry and make the prospect of energy shortages a reality, pushing up the prices for everyone”.

But Mr Miliband left no doubt in his letter that he was ready to take on the energy giants, whom he accused of “overcharging” millions of consumers while failing to use their massive profits to invest in infrastructure.

The Labour leader wrote: “You and I know that the public have lost faith in this market. There is a crisis of confidence.

“We face a stark choice. We can work together on the basis of this price freeze to make the market work in the future. Or you can reinforce in the public mind that you are part of the problem not the solution.”

Labour said yesterday that Mr Miliband’s plans would save the typical household £120 and an average business £1,800 between May 2015 and January 2017, at an estimated cost to the energy companies of £4.5bn.

The party is planning radical reform of the gas and electricity market to bring down prices, but the necessary legislation cannot be in place before 2017, with the freeze intended to protect consumers up to that date.

As Labour’s conference wrapped up, Shadow Health Secretary Andy Burnham claimed the Government planned to privatise the NHS and turn it into an American-style health service.

The shadow health secretary accused the Government of running down the NHS as part of a plan to “soften it up” for privatisation, telling delegates at the Labour Party conference in Brighton that many patients were being denied treatment simply because of where they lived.